Finance Bill 2026 introduces 10% tax credit to encourage businesses to integrate with FBR’s digital monitoring systems.
ISLAMABAD: The Finance Bill, 2026 has proposed a new tax credit scheme under the Income Tax Ordinance, 2001 to encourage taxpayers to integrate their businesses with the Federal Board of Revenue’s (FBR) computerized systems for real-time reporting and monitoring.
The proposed amendment introduces Section 64D into the Income Tax Ordinance, 2001, extending tax credit benefits to individuals and entities required under the Income Tax Ordinance, the Sales Tax Act, 1990, or the Federal Excise Act, 2005 to integrate with the FBR’s digital infrastructure.
Under the new provision, eligible taxpayers will be entitled to a tax credit for expenditure incurred exclusively on the purchase, acquisition, installation, or implementation of equipment, hardware, software, or other electronic components used solely for integration with the FBR system.
The Finance Bill states that:
“Any person required, under this Ordinance, the Sales Tax Act, 1990 or the Federal Excise Act, 2005, to integrate with the computerized system of the Board for real-time production monitoring, or for the recording or reporting of sales or receipts, shall be entitled to a tax credit…”
The Federal Board of Revenue will have the authority to prescribe limitations, conditions, and restrictions for availing this tax credit.
The proposed Section 64D further provides that the tax credit amount for the tax year in which the electronic system is installed, integrated, and configured with the FBR’s computerized platform will be 10 per cent of the actual investment made in such digital infrastructure.
However, the bill clarifies that the tax credit will not be applicable to ongoing operation and maintenance expenses, restricting the benefit strictly to capital investment in integration-related systems.
Additionally, the credit can only be adjusted against normal tax payable under Division I or Division II of Part I of the First Schedule, ensuring it is applied against standard tax liabilities rather than reduced or final tax regimes.
Tax analysts suggest the measure is designed to accelerate digital compliance across Pakistan’s tax system by incentivising businesses to adopt FBR’s real-time reporting infrastructure. It is also expected to improve transparency in sales reporting and reduce under-declaration of income.
If approved, the new tax credit will take effect following the enactment of the Finance Bill, 2026, marking another step towards the digitisation of Pakistan’s tax administration framework.
